LONDON, March 14 (Reuters) - U.S. Secretary of State John Kerry will seek assurances from Russia at talks in London on Friday that it will not try to annex Crimea and will address concerns over Ukraine through negotiation, a senior State Department official said.

Kerry and Russian counterpart Sergei Lavrov are meeting in a last-ditch diplomatic efforts to defuse tension between Moscow and the West as a referendum in Crimea, a Russian-majority region of Ukraine, looks set to proceed on Sunday.

The two men, posing for photographs at the U.S. ambassador's residence in London, said they had a lot to talk about.

"I look forward to the opportunity to dig into the issues and possibilities that we may be able to find on how to move forward together to resolve some of the differences between us," Kerry told reporters.

Lavrov said it was a "difficult situation" as much had happened and a lot of time had been lost.

"Now we have to see what can be done," he said, through an interpreter.

The referendum in Crimea, arranged after mass protests toppled pro-Russian Ukrainian President Viktor Yanukovich, will decide whether Crimea will become part of Russia.

Kerry has warned the Kremlin that the United States and the European Union will impose sanctions against Russia as soon as Monday if the referendum goes ahead and is seeking a commitment to find ways to de-escalate the conflict and bring Russian forces back to barracks.

Ahead of meeting Lavrov, Kerry spoke to British Prime Minister David Cameron who said Britain wanted to see progress as much as the United States.

"We want to see Ukrainians and the Russians talking to each other and if they don't then there are going to have to be consequences," Cameron told reporters on Friday.

"I think the alignment of Britain and the European Union with the position that the U.S. is taking is absolutely right. We must keep at them."

TROOPS MASSING ON BORDER

The U.S. official, who briefed reporters before the trip, suggested the United States would offer additional proposals for resolving the tensions, which has brought U.S.-Russian relations to one of their lowest points since the Cold War.

So far Moscow has not shown it is ready to seriously engage in a political solution, according to U.S. officials.

"If the Russians choose not to take that course, if President Putin chooses not to avail himself with that opportunity, then as President (Obama) has said there will be costs," the official said.

"We have made clear there is a preferred way to deal with this, which is to begin de-escalating."

The massing of Russian troops on Ukraine's border has concerned Washington and will be raised during the discussion with Lavrov, according to the senior State Department official.

"We are very concerned. This is the second time inside of a month that Russia has chosen to mass large amounts of force on short notice without much transparency around the eastern borders of Ukraine," the official said.

"It certainly creates an environment of intimidation, it certainly is destabilising and that will be one question asked what is meant by this."

The United States has posed several questions to Moscow in a one-page letter that explores whether Moscow would be willing to calm tensions by withdrawing its forces back to barracks and agreeing to international monitors in Crimea.

Ukraine has made clear it is willing to negotiate with Russia and is prepared to guarantee autonomy for Crimea within Ukraine. The international community has said it will not recognise the outcome of the referendum planned for Sunday.

Crimea has a narrow ethnic Russian majority and many in the province of two million people clearly favour rule from Moscow.